Event

Apr 1, 2019

Broker between two worlds

Sure, everyone knows what venture capital is. But what is Venture Client? On Thursday Gregor Gimmy was a guest at the afterwork talk of our colleagues from TOI. For many years, he was head of the BMW Startup Garage - today, he brings established companies together with fresh start-ups.

By
Andrea Vorm Walde

In fact, Gregor Gimmy and his team at 27pilots are 'to blame' because companies can equip and enrich their products in a relatively short time with top technologies as well as start-ups can win with little marketing efforts and acquisition spendings big customers for their developments. That's the venture client concept in a nutshell.

From my very first very superficial point of view: how nice for the start-ups. But why do we need a company like BMW or BSH to give us a good example? Every company has staffed its innovation lab, various development departments, owns experts, specialists ... So why are the required technologies not created internally, exactly how you need them?

The answer is simpler than expected, and in my opinion, sometimes surprising:

First of all, IP: It's the start-ups that have this claim on highly innovative, groundbreaking technologies - and they cannot even be recreated. And I'm not even talking about speed, agility, or mindset that traditional companies do not share, but alone from the legal side (for example, take only the current lawsuit between Apple and Qualcomm ...).

And secondly $$$: The start-ups have the capital that the company lacks for development. Do the start-ups have the money? For me at first surprising, but of course you must not forget the venture capital. Development departments pale with envy in front of start-up’s venture capital. We are talking about billions!

Conclusion win-win: One has a top product and the capital for innovation, but no customers. The other one has a lot of existing customers, but always needs further development. In other words, in a partnership, the companies have the latest technologies for their products in no time at all, and the start-ups are already gaining the first customer before their development is even on the market - the Venture Client!

It all sounds so logical that you wonder why it does not just go by itself. What does the 'broker' need? One answer is: speed. Although almost every company already works together with start-ups, on average the process takes about two years from the first idea to successful cooperation. Time that has neither an innovation nor a market full of competitors.

Gregor Gimmy, on the other hand, can count on his experience and know-how in both segments. It accelerates the whole process by taking time-consuming steps for both the company and the start-up and eliminating known obstacles:

1. The selection of the start-up

Not every startup is eligible for such a partnership. Gregor Gimmy, for example, strictly deals only with organizations that already have venture capital. Not because of the existing funds alone, but above all because a selection has already taken place there: To be interesting for venture capitalists, the start-up must prove a high quality and at the same time still be in an early phase.

2. The selection of the company

If a company still thinks that a start-up has to apply to it, it has to clean up in its own mindset. Start-ups have the skills and the money and therefore self-esteem. So what has to happen is the offer of a partnership on equal footing, with respect and the correct wording.

3. Dissolution of the counterarguments

A company that would like to pride themselves on "inventing" only internally will probably perish. The risk of missing out on new technology and watching the competition for success is huge. The developers and engineers in the company have known that for a long time - as shown by in-house inquiries from the very same departments that Gregor Gimmy knows from his time at BMW.

Likewise, a start-up goes down that recoils from serving a single exclusive client. Rather, it is important to recognize the opportunities of rapid growth, the know-how gain on corporate policy processes and the resulting networks and to use for themselves.

4. Bridging cultural differences

Competence and professionalism win. Anyone who imagines a start-up as a merger of a few young nerds, is already wrong. Ingenious technologies are developed by high-end experts who have tremendous knowledge and are quick to do so. They meet employees in groups who know very well that the merger is their chance to advance their own products quickly and purposefully, to stay ahead of the competition and to remain marketable. Experts therefore meet experts who speak the same language and benefit from each other.

5. Pricing

Long price negotiations obstruct both speed and quality. Gregor Gimmy makes it short: It's about buying a valuable and necessary product - either a finished product in the start-up phase or in individual cases of a prototype - and not services. Thus, neither the idea of the company has room to get low on high-end technologies, nor the idea of the start-up to inject unnecessary workshops or consultations on top. Rather, it is about the calculation of real costs and clear added value and the corresponding pricing.

6. Integration

'Adopt Startup Solutions at Scale' is how Gregor Gimmy himself formulates the task of mediation. In order for this to work satisfactorily, it is imperative that the company internally has its own pool, which facilitates the implementation, which in turn acts as a mediator to its own departments and suppliers, bringing the brand identity to the start-up. The BMW Startup Garage and the BSH Startup Kitchen are the best examples of the successful integration of external innovations and technologies into the corporate strategy.

In short: The above-mentioned win-win effect is, so to speak, again potentiated. The 'product' of 27pilots, the venture-client concept, also means that knowledge and experience always drive developments, save time and thus reduce costs. If you want to read more: our colleague Michael Leitl published an interview in the TOI-blog (in German) or have a look at the Harvard Business Manager interview from last year (English).

Andrea Vorm Walde

PR and Communications

Andrea takes care of our PR and likes to show how innovative and versatile Indeed is. Actually, she is responsible for the words - nevertheless, she usually leaves us here first because we as designers and developers want to report authentically in our blog. And that’s what we can do best ourselves.

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